UPDATE: U.S. PRESIDENTIAL CANDIDATES IGNORE ASIA AT THEIR PERILLast week I wrote a post here on Sovereign Wealth Funds (SWFs) and how they're now the Big Gorillas of global financial markets. SWFs are funds of countries filthy rich in oil revenues (especially in the Middle East ) which want to diversify their holdings around the world. They have boat loads of money to invest. It's important to note that most of these funds are in countries and regions that are NOT democracies. Most, though not all, are Arab/Muslim funds.
Yesterday came news of the Abu Dhabi SWF negotiating to buy the fabulous Chrysler Building in New York for $800 million, small change for that fund, no doubt. This is my favorite tall building in the city, down Lexington Avenue in Midtown.
Not sure that this kind of foreign investment on American soil should worry us at this point---it's certainly not the first time---- but it appears there's nothing we can do about it anyway and it's only going to increase in the coming years.
One of the reason's I'm in favor of dissolving the death (inheritance) tax or at least keeping it low as it currently is---is it often forces heirs to put their family businesses or properties on the block just to pay those death taxes. That's when a giant foreign SWF can swoop in and take advantage of a sale, often under duress.
What happens when an SWF comes in and wants to buy The New York Times (that might be an improvement)? Or Fox News? Or Exxon Mobil? Interesting questions that we should ponder.
U.S. Secretary of Treasury Henry Paulson, Mr. Swinging Global Finance, comments on SWFs investing in America here.
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